The exchange rate is one of the most influential variables on economic activities in a small open economy such as Korea. In an economy that highly depends on the external sector, exchange rate movements can affect exports and imports and ultimately lead changes in economic growth and national income. Also, they have a significant effect on the price level, which might impact the competitiveness of ...

The effectiveness of exchange rates on exports empirically appears to be weak across countries, while many theoretical models conclude that exchange rate depreciation can stimulate economic activities and boost exports through the mechanism of price competitiveness. This anomaly is the so-called “exchange rate disconnect puzzle,” one of the central puzzles in international macroeconomics, referring ...

The coronavirus outbreak has rapidly spread out around the world. Since the first case reported in the United States on January 20, 2020, the United States has become one of the most severely infected countries by the virus with the numbers of confirmed cases and deaths reaching more than 360,000 and 10,000 in the first week of April 2020. These outreach the official numbers of confirmed and deaths ...

With the U.S. economy looking resilient, the Federal Reserve ("the Fed") is pushing to normalize the stance of monetary policy. The Fed ceased the bond-purchasing program (QE) in October 2014, and raised the federal fund rate in December 2015 for the first time since the 2008 global financial crisis. People worry that the Fed's contractionary monetary policy may have negative influences on emerging ...

Due to globalization and development in financial integration over the last three decades, gross foreign assets and liabilities have increased dramatically in developed and emerging countries. The foreign assets and liabilities of developed countries were, on average, about 50% of GDP in the early 90s, but now reach nearly 400%. Emerging countries have historically tended to have more foreign ...